Financing For Hotels, Motels & Lodging

Businesses in the lodging, hotel, and motel industry know the struggles that come with the seasonal nature of their business. While they thrive during the busy period, the opposite is true during dry spells. Worse, there is no telling when the drought would start and end.

Guests usually make advance reservations during the dry periods when business is slow. Because they have many choices at this time, prospective guests will just move on and look for other accommodations when the images they see on the site are not impressive.

Thus, businesses in the hospitality industry need to stay competitive the entire year, even during the off-season when demand is low. This is where business loans for lodgings, hotels, and motels come into the picture. The additional funding can help these businesses stay afloat during the down months.

Understanding Business Loans for Motels and Hotels
Loans intended for businesses in the hospitality industry like lodging houses, hotels, and motels are available to help ease the burden on the cash flow cycle, and cover for recurrent expenses incurred by these businesses. Aside from funding short-term and large-ticket purchases, the business loan can bridge the gap between the slow and peak seasons.

Forms of business loans for hotels include:
• SBA Loan
• Business Term Loan
• Equipment Financing
• Business Line of Credit
• Merchant Cash Advance
• Working Capital Loan
• Revenue-Based Business Loan

How Business Loans for Hotels, Motels, and Lodgings Work: Each of the loan products on the list is suitable for a particular type of cash flow situation or expense. Hotels, for instance, tend to prepare for busy seasons during slow seasons. They may use the loan to upgrade amenities or furniture, or launch ad campaigns while their target clients are still planning for their future trips. For seasonal concerns, two of the most ideal solutions are the Business Line of Credit and Merchant Cash Advance.

The latter, in particular, is quite appropriate for hotels whose guests usually pay via credit cards, and make advance reservations. This way, hotels get a good idea on their potential credit card sales for the next few months.

The maximum amount and associated fees for Merchant Cash Advances are determined by future and previous credit card sales. Hotels can get approved loans even when business is on a slow turn. They can make the necessary investments without having to think about the substantial payments until the start of the busy season.

On the other hand, Business Lines of Credit are ideal for businesses that are often beset by sudden expenses. This may be due to unexpected cancelled reservations by guests or some facilities that suddenly need repairs – even if they have just recently been maintained. If you find your business in this scenario frequently, then Business Lines of Credit provide the perfect solution.

It is intended primarily for short-term expenses because the balance needs to be settled in full within a short period. Once you have made payment, you can draw again from your line of credit. The good thing is, you don’t need to apply each time you need extra funding for your operations.

At Fast Direct Funding, we facilitate loans for businesses in the hospitality industry. Get in touch with use today for a FREE consultation on how you can avail of a business loan for hotels, motels, and lodgings.